Feds to hospitals: It's okay to help docs get IT

August 18, 2006

Hospitals and large groups will soon be able to subsidize doctors' acquisition of EHR and e-prescribing systems, under new amendments to the Stark self-referral regulations and new federal safe harbors. But whether these rule changes will actually prompt many hospitals or groups to donate technology-or motivate many physicians to accept it-remains to be seen.

Hospitals and large groups will soon be able to subsidize doctors' acquisition of EHR and e-prescribing systems, under new amendments to the Stark self-referral regulations and new federal safe harbors. But whether these rule changes will actually prompt many hospitals or groups to donate technology-or motivate many physicians to accept it-remains to be seen.

Announced by HHS on Aug. 1, the new regulations will go into effect Oct. 1 unless they're overridden by pending legislation in Congress. The House health IT bill passed in July differs from the HHS rules in some important respects. Notably, it doesn't specify that subsidized EHRs need to be interoperable-an omission that HHS Secretary Mike Leavitt finds objectionable. But he expressed hope that a House-Senate conference committee, formed to reconcile bills passed by the two chambers, would adopt language similar to that of the new HHS regs.

The rule changes are more expansive than the ones proposed last year. For example, hospitals are allowed to subsidize EHRs for any doctor in the community, instead of just those on its staff. But, while they're not permitted to discriminate on the basis of volume of admissions, hospitals can limit donations only to doctors who have privileges. This is what they'll probably do, predicts Erica Drazen, of First Consulting Group in Lexington, MA. Even offering subsidies to doctors on a hospital's staff would be very expensive, she notes, so they're unlikely to go beyond that.

But even if hospitals do foot that much, the new regs only allow them to subsidize "EHR software, information technology, and training services." Neither hospitals nor groups can give doctors computer equipment as part of an EHR system (hospitals can, however, provide e-prescribing hardware). So at most, many physicians will receive only 85 percent of the cost of EHR software, which represents about a third of the initial cost of an EHR system.

To qualify for the Stark exception and the federal safe harbor, donated EHRs must pass muster with the Certification Commission for Healthcare Information Technology (CCHIT). They're also supposed to be interoperable, although Leavitt said that merely being certified is sufficient this year, because it shows that an EHR is "on a pathway" to interoperability.

Few of the ambulatory products certified so far have inpatient versions. But Drazen says hospitals can write interfaces, which will be much easier if the practices they support are on the same EHR. She believes that most institutions will offer no more than three different products; some hospital executives have said they'll offer only one, providing it over the Internet from a central server. Whether this will fly with physicians is uncertain; many doctors would like a choice of EHR, notes Tennant, and many are reluctant to let a hospital store-and thereby, have access to-their patient and financial data.